Monthly Archives: May 2008

Extra Credit, Tuesday Edition

Posted on May 6, 2008 by Felix

What are corporate bonds worth in a recession? Possibly substantially more than they’re trading at now. Translating Corporate Speak: Wynn [Unforeseen Upside Edition #2]: Steve Wynn shows how stock buybacks should be done. The official word on whether capital gains … Continue reading →

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How to Monetize Free Wi-Fi

Posted on May 6, 2008 by Felix

Susan Stellin reports today on the way in which hotels, airports and the like are increasingly rolling out free wi-fi in addition to their paid-for offerings. She explains: Travelers want to log on everywhere at no charge, while hotels, airports … Continue reading →

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Vikram Pandit, COO of Citigroup

Posted on May 6, 2008 by Felix

David Enrich has gotten the first interview with Vikram Pandit since Citigroup announced that "substantially all" of the investor’s in Pandit’s Old Lane hedge fund had deserted it. The bad news is that either he didn’t ask about Old Lane, … Continue reading →

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How Long Until the Housing Market Recovers?

Posted on May 6, 2008 by Felix

Cyril Moulle-Berteaux says "the housing market is bottoming right now": During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing … Continue reading →

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S&P Stops Rating Bonds Which Aren’t Being Issued

Posted on May 5, 2008 by Felix

I missed this on Thursday: Standard & Poor’s will stop rating new bonds composed of U.S. second mortgages, saying it’s too hard to assess the debt while the housing slump continues… The unit of McGraw-Hill Cos. said today that it … Continue reading →

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Can Cities Transcend National Politics?

Posted on May 5, 2008 by Felix

On Thursday, I posted a blog entry about why local government was unrepresentative, uncreative, and dominated by national parties whose national policies are largely irrelevant on a local level. The same day (I was in la-la land and oblivious of … Continue reading →

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Extra Credit, Monday Edition

Posted on May 5, 2008 by Felix

Pricing power: signal versus noise Greenspan Goes for "Pale Recession" Googlewhack: "WTF is a "pale recession"? It sounds like a Clint Eastwood flick crossed with a Nabokov novel." Hillary Clinton Doesn’t Listen to Economists: ‘When asked this morning by ABC … Continue reading →

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Is Bank of America Rethinking Countrywide’s Value?

Posted on May 5, 2008 by Felix

At some point, whenever somebody is trying to value a financial institution, a term like "tangible equity" or "book value" will start being thrown around. They’re different ways of playing the assets-minus-liabilities game, but that’s where the problems start: if … Continue reading →

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Is Illiquidity Just Another Word for Uncertainty?

Posted on May 5, 2008 by Felix

If Steve Waldman could only dumb his prose down a bit, he’d be perfect for Slate’s new business site: he’s great for compellingly contrarian takes on the news. Today, he takes a shot at liquidity, saying that it’s not necessarily … Continue reading →

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Why Negative Equity in Car Loans Doesn’t Matter

Posted on May 5, 2008 by Felix

Nouriel Roubini is now worried about negative equity in auto loans; I have to say this doesn’t bother me in the slightest. For one thing, auto loans are personal loans, they’re not non-recourse mortgages, which means you can’t jingle-mail your … Continue reading →

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Small Farmers Can’t Feed the Planet

Posted on May 5, 2008 by Felix

Mark Thoma and Alex Tabarrok and Paul Kedrosky all feature a tour de force mini-essay from Paul Collier, who left it as a comment on Martin Wolf’s blog. I’ve been a big fan of Collier for a while, and I … Continue reading →

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Why Yahoo Shouldn’t Buy Back Its Own Stock

Posted on May 5, 2008 by Felix

Bill Miller is kicking himself this morning. The second-largest shareholder in Yahoo, he wanted $35 to sell out to Microsoft, and so he held on to his shares rather than hand them over to arbitrageurs at $29 or so. But … Continue reading →

Posted in stocks, technology | 6 Comments

Vikram Pandit’s Amazing Disappearing Hedge Fund

Posted on May 4, 2008 by Felix

Eric Dash reports that investors in Vikram Pandit’s Old Lane funds redeemed "substantially all" of their funds when they were given the opportunity in late March. Old Lane, which had $4.5 billion in funds under management last year, is now … Continue reading →

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Extra Credit, Sunday Edition

Posted on May 4, 2008 by Felix

Cable’s paper: Will Cablevision buy Newsday? Maybe: "They haven’t been able to agree with their board on more than one offer to take their company private; it’s almost as if they hope that a newspaper would be dead weight sufficient … Continue reading →

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Extra Credit, Friday Edition

Posted on May 2, 2008 by Felix

Posting’s going to be light today, when I resurface on Monday I’ll be blogging from Berlin. Earlier posts for you! But in the mean time: The New Value of Value Consciousness: For the first time in many years, everybody’s starting … Continue reading →

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The Healthy Side of the Media Business

Posted on May 2, 2008 by Felix

Yesterday, we learned that Grand Theft Auto IV sold a record 609,000 copies, generating more $48.4 million, in one day – and that was just in the UK. Today, it’s Viacom’s turn: Entertainment company Viacom Inc. reported a 33 percent … Continue reading →

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Extra Credit, Thursday Edition

Posted on May 1, 2008 by Felix

Sovereign wealth fund pushes back against EU regulation Is Personal Consumption Really Up? No Uptick Rule: Convenient Scapegoat? Related: A New Wave of Vilifying Short Sellers For the record: stupidest moment in policy ever? I find it hard to believe … Continue reading →

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Journalists at Conferences

Posted on May 1, 2008 by Felix

Mark Thoma gets a taste of what it’s like to be a journalist at a conference: Because I’m a blogger, they gave me a press pass. That’s kind of cool I guess, or so I thought at first, but it … Continue reading →

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Preventing Banks From Getting Too Big To Fail

Posted on May 1, 2008 by Felix

An intriguing idea from Alexander Campbell: Why should we let banks get "too big to fail?" Why not simply impose exposure limits – not capital requirements, which can be gamed, but hard limits, backed by sanctions – set as a … Continue reading →

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Why Local Government is Unrepresentative and Uncreative

Posted on May 1, 2008 by Felix

Many thanks to Harvard’s David Schleicher for letting me know about his wonderful new paper, "Why Is There No Partisan Competition in City Council Elections?". This isn’t (only) dry political science, it can also be read as a call for … Continue reading →

Posted in cities, Politics | 1 Comment

Steve Ballmer, Fence-Sitter

Posted on May 1, 2008 by Felix

The WSJ is reporting that Microsoft’s board, having met to decide what to do about the Yahoo bid, has decided, um, not to decide what to do about the Yahoo bid. Instead it’s punting the decision back to Steve Ballmer, … Continue reading →

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How a Weaker Dollar Can Mean a Bigger Trade Deficit

Posted on May 1, 2008 by Felix

Tim Worstall, after leaving a semi-cryptic comment on my blog yesterday, explains himself in a bit more detail today. I was confused about how US net exports could deteriorate even as the currency was weakening, but it turns out that … Continue reading →

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